The purpose of this study was to investigate the utility of stably transfected MDCK-hPepT1 cells for identifying peptide transporter substrates in early drug discovery and compare the characteristics of this cell line with Caco-2 cells. MDCK-hPepT1, MDCK-mock, and Caco-2 cells grown to confluence on 24-well Transwell were used for this study. Expression levels of different transporter proteins (PepT1, PepT2, P-gp) in these cell lines were assessed by qRT-PCR. Permeability studies were conducted in parallel in all the cells with a diverse set of peptide substrates using the optimized experimental condition: 100 microM, apical pH 6.0, basolateral pH 7.4, 2 hr incubation at 37 degrees C. Permeability studies were also conducted with classical P-gp substrates (tested in bi-directional mode) and paracellularly absorbed probes to investigate the differences between the cell lines. As expected, MDCK-hPepT1 cells express significantly higher level of PepT1 mRNA compared to both Caco-2 and MDCK-mock cells. Efflux transporter, P-gp, was expressed adequately in all the cell lines. Permeability studies demonstrated that classical peptide substrates had significantly higher permeability in stably transfected MDCK-hPepT1 cells compared to MDCK-mock and Caco-2 cells. The transfected MDCK-hPepT1 cells were qualitatively similar to Caco-2 cells with respect to functional P-gp efflux activity and paracellular pore activity. Stably transfected MDCK-hPepT1 cells have been demonstrated as a viable alternative to Caco-2 cells for estimating the human absorption potential of peptide transporter substrates. These cells behave similar to Caco-2 cells with regards to P-gp efflux and paracellular pore activity but demonstrate greater predictability of absorption values for classical peptide substrates (for which Caco-2 cells under-estimate oral absorption).